Ending a months-long bidding war, Dollar Thrifty (NYSE:DTG) signed off over the weekend on a sweetened takeover bid from Hertz (NYSE:HTZ) worth $1.56 billion.
The deal leaves Avis Budget Group (NYSE:CAR) as the loser in the battle to control Tulsa-based rental car company Dollar Thrifty.
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Hertz stepped up to the plate over the weekend and raised its bid for Dollar Thrifty to $50 a share, trumping Hertz’s offer of $43.60 in cash and 0.6366 of a share of Hertz common stock.
Dollar Thrifty said as part of its new agreement, it will pay about $6.87 a share as a special dividend immediately prior to closing. Also, to facilitate a faster closing, Hertz said it has begun the process of divesting its Advantage Rent-a-Car business.
“We are pleased to reach an agreement that reflects the significant improvement in Dollar Thrifty's operating performance since the initial merger agreement was executed on April 25, 2010, and is further supported by Hertz's divestiture commitment to assure timely completion of the transaction,” Dollar Thrifty Chairman Thomas Capo and Hertz CEO Mark Frissora said in a combined statement. “We believe a combination of our companies is in the best interest of our respective stakeholders.”
Shares of Dollar Thrifty jumped 5.8% to $50.80 in Monday’s premarkets in the wake of the new deal. Hertz’s stock gained 2% to $10.25, while shares of Avis were inactive.
Dollar Thrifty also announced plans to postpone its special shareholder meeting from September 16 to September 30 to let shareholders consider the revised terms of the merger agreement.